Determinants of Internal Versus of External R&D Offshoring: Evidence from Spanish Firms

Thumbnail Image
Full text at PDC
Publication Date
Advisors (or tutors)
Journal Title
Journal ISSN
Volume Title
Google Scholar
Research Projects
Organizational Units
Journal Issue
This paper analyzes the determinants of R&D offshoring of Spanish firms using infor-mation from the Panel of Technological Innovation. We find that being an exporter, continuous R&D engagement, applying for patents, being a subsidiary, and firm size are factors that positively affect the decision to offshore R&D. In addition, we obtain that the factors that influence this decision for firms that belong to a business group differ depending on whether the firm purchases R&D services within the group or through the market.
Este trabajo analiza los determinantes del offshoring de I+D de las empresas españolas utilizando información del Panel de Innovación Tecnológica. Los resultados indican que ser exportador, realizar I+D de forma continua, solicitar patentes, ser una filial y el tamaño de la empresas afectan positivamente a la decisión de realizar offshoring de I+D. Además, se obtiene que los factores que influyen en esta decisión para las empresas que pertenecen a grupos empresariales difieren dependiendo de si la empresa compra los servicios de I+D dentro del grupo o a través del mercado.
The authors are particularly grateful to María García-Vega, Adelheid Holl, Alberto López, Maria Luisa Mancusi, Bettina Peters and Iulia Siedschlag for useful comments. We also thank the seminar audience at the ENEF 2013 Meeting (Madrid). This research has been partially funded by the CICYT project ECO2010-19847.
UCM subjects
Anagnostou, A. and Carthy, I. (2004) The impact of outsourcing on the transaction costs and boundaries of manufacturing, International Journal of Production Economics, 88, pp. 61-71. Argyres, N. (1996) Evidence on the role of firm capabilities in vertical integration decisions, Strategic Management Journal, 17, pp. 129–150. Aubert, B. A., Patry, M. and Rivard, S. (1998) Assessing the risk of IT outsourcing, CIRANO Working Papers 98s-16, CIRANO. Baccara, M. (2007) Outsourcing, Information Leakage and Consulting Firms, RAND Journal of Economics, 38(1), pp. 269-289. Cassiman, B. and Veugelers, R. (2006) In Search of Complementarity in Innovation Strategy: Internal R&D and External Technology Acquisition, Management Science, 52(1), pp. 68–82. Coase, R. (1937) The nature of the firm, Economica New Series, 4, pp. 386-405. Chaney, T. (2013) Liquidity Constrained Exporters, NBER Working paper No. 19170, National Bureau of Economic Research. Chang, C.-L. and Robin, S. R. (2006) Doing R&D and/or Importing Technologies: The Critical Importance of Firm Size in Taiwan’s Manufacturing Industries, Review of Industrial Organization, 29(3), pp. 253-278. Chen, Y. and Sen, D. (2012) Strategic outsourcing under economics of scale, Bulletin of Economic Research. DOI: 10.1111/j.1467-8586.2012.00467.x . Diaz-Mora, C. (2008) What factors determine the outsourcing intensity? A dynamic panel data approach for manufacturing industries, Applied Economics, 40(19), pp. 2509-2521. Dunne, T. and Schmitz, J. (1995) Wages, employer size-wage premia and employment structure: Their relationship to advanced-technology usage at U.S. manufacturing establishments, Economica, 62, pp. 89-107. García-Vega, M. and Huergo, E. (2011) Determinants of International R&D Outsourcing: The role of trade, Review of Development Economics 15(1), 93-107. García-Vega, M. and Huergo, E. (2013) Multinationals’ Technology Transfers and firms’ performance, in: S. Beugelsdijk, S. Brakman, H. van Ees and H. Garretsen (eds.), Firms in the International Economy: Firm Heterogeneity Meets International Business, CESifo Seminar Series, The MIT Press. Goyal, S., Moraga-González, J. and Konovalov, A. (2008) Hybrid R&D, Journal of the European Economic Association, 6(6), pp. 1309-1338. Greene, W. (2003) Econometric Analysis. Prentice Hall. New Jersey: Fifth Edition. Hamermesh, D. S. (1980) Commentary, in: J. J. Siegfried (ed.), The Economics of Firm Size, Market Structure and Social Performance, Washington D.C.: Federal Trade Commission. Hamermesh, D. S. (1993) Labor Demand. Princeton, NJ: Princeton University Press. Holl, A. and Rama, R. (2014) Foreign subsidiaries and technology sourcing in Spain, Industry and Innovation, 21(1), pp. 43-64. Iammarino, S., Sanna-Randaccio, F. and Savona, M. (2009) The perception of obstacles to innovation. Foreign multinationals and domestic firms in Italy, Revue d'économie industrielle, 1, pp. 75-104. Jabbour, L. and Zuniga, M. P. (2009) Drivers of the offshore outsourcing of R&D: Empirical evidence from French manufacturers, Discussion Papers 09/04, University of Nottingham, GEP. Jensen, P. (2009) A learning perspective on the offshoring of advance service, Journal of international Management, 15, pp. 181–193. Kremer, M. (1993) The O-Ring Theory of Economic Development, The Quarterly Journal of Economics, 108, pp. 551-75. Lai, E., Riezman, R. and Wang, P. (2009) Outsourcing of innovation, Economic Theory, 38(3), pp. 485-515. Lewin, A. and Peeters, C. (2006) The top-line allure of off-shoring, Harvard Business Review, March, pp. 22-24. López, A. (2011) Effect of microaggregation on regression results: an application to Spanish innovation data, The Empirical Economics Letters, 10(12), pp. 1265-1272. Martinez-Noya, A., Garcia-Canal, E. and Guillen, M.F. (2012) International R&D service outsourcing by technology-intensive firms: Whether and where? Journal of International Management, 18(1), pp. 18-37. National Science Foundation (2010) Science and Engineering indicators. 2010, Chapter 4. Research and Development: National Trends and International Linkages. Available at: . Nieto, M. J. and Rodríguez, A. (2011) Offshoring of R&D: looking abroad to improve innovation performance, Journal of International Business Studies, 42(3), pp. 345–361. Nieto, M. J. and Rodríguez, A. (2013) The challenge of R&D offshoring: Implications for firm productivity, in: T. Pedersen et al. (eds.): The Offshoring Challenge, Springer-Verlag. Peteraf, M. (1993) The cornerstones of competitive advantage: A resource-based view, Strategic Management Journal, 14, pp. 179 – 191. Ornelas, E. and Turner, J. (2008) Trade liberalization, outsourcing, and the hold-up problem, Journal of International Economics, 74(1), pp. 225-241. Williamson, O. E. (1975) Markets and Hierarchies, Free Press, N.Y. Williamson, O. E. (1979) Transaction cost economics: The governance of contractual relations, Journal of Law and Economics, 22, pp. 233-261. Williamson, O. E. (1981) The economics of organization: The transaction cost approach, American Journal of Sociology, 87, pp. 548-577. Zellner, A. and D. Haung (1962) Further properties of efficient estimators for seemingly unrelated regression equations, International Economic Review, 3(3), pp. 300-313.